Image Source : Krish Capital Pty Ltd

Index Update: On 31st January 2025, the NZ equities closed in green amidst broad-based buying. On the same day, S&P/NZX 50 Index witnessed a rise of 0.52% to end the session at 12,995.010 and S&P/NZX 20 Index rose by 0.61%. Also, S&P/NZX 10 Index increased by 0.52%. Also, S&P/NZX All Information Technology encountered a rise of 1.85% to 3,034.750. However, S&P/NZX All Energy witnessed a decline of 1.55%.  

Macro Update: Stats NZ stated that, in December 2024, goods exports increased by $995 Mn (17%) to $6.8 billion and goods imports rose by $404 Mn (6.5%) to $6.6 Bn as compared to December 2023. Notably, the monthly trade balance was a surplus of $219 Mn. Also, mechanical machinery and equipment lead an increase in imports. Mechanical machinery and equipment increased $210 Mn (or 26%) to $1.0 Bn. The main contributions were turbo-jets and turbo-propellers, up $151 Mn to $262 Mn, and computers, up $107 Mn to $244 Mn.  

Top Market Movers: Among top gainers, General Capital Limited (NZX: GEN) witnessed a rise of 14.29% to close at $0.32 per share. On the other hand, New Talisman Gold Mines Limited (NZX: NTL) declined by 17.39% to $0.038 per share. 

Commodity Update: On Friday, tariff concerns drove the dollar and gold prices up. U.S. economic growth data for Q4 showed a slowdown yet remained strong enough for investors to anticipate gradual interest rate cuts by the Federal Reserve this year. The market is now awaiting the December U.S. personal consumption expenditures (PCE) price index report, a key inflation measure for the Fed. In commodity markets, gold rose 0.13% to $2,848.90, silver gained 0.58% to $32.68, while copper dropped 0.25% to $9,099.00. Brent crude rose 0.21%, closing at $76.33 amid tariff threats affecting U.S. imports from Mexico and Canada.  

In July 2024, the S&P/NZX 50 index surpassed both the neckline of a Head and Shoulders pattern on the daily chart and a key resistance level marked by its 2023 high. This breakout indicates that the uptrend, which started in November 2023, is likely to persist and could push the index toward its historical peak from 2021. Since the breakout, the index has been forming higher highs and higher lows and bouncing off a short-term upward trendline established since June 2024 in the last trading session, reinforcing the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is trading near its midpoint, reflecting neutral market sentiment in the short-term.  

Our Stance: It could be said that the broad-based buying in the NZ markets supported the market momentum on 31st January 2025. The US Department of Labor stated that, in the week ending January 25, the advance figure for seasonally adjusted initial claims stood at 207,000, reflecting a decrease of 16,000 from the previous week's unrevised level of 223,000. On 5th February, data about the US trade deficit is expected to be released. There are still uncertainties associated with US trade policies which might impact the global and NZ markets.